Tuesday, January 22, 2008

I've been talking for a long time about the fact that piracy is an indication of market inefficiencies. The music industry was so out of step with the world when people began fil-sharing with peer to peer software. The fact was that the disappearance of the single and being forced to overpay for entire cd's when most people only wanted a few tracks on the release was ridiculous in the digital age. The industry response was to sue kids. It took a computer guy, Steve Jobs to show them that they needed to "compete" with piracy, make it easier to buy than to steal.

Another fascinating case study he talks about is the pharmaceutical industry. In India, where most people cannot afford to pay for western drugs, the government decided to ignore IP law and let people knock off drugs. There wasn't a value loss to large pharma companies because they're wasn't a viable market for their products there. However, the impact on life expectancy of this policy decision was dramatic.

1 comment:

Will Hare
said...

Lessig's presentation is always awesome. I saw him speak on the topic a few years back at FlashForward in San Fran. I even bought his book ("Free Culture", I think it was).

It's funny how blindsided the corporate music monster was to the whole shift in the industry. Luckily two things occurred. Powerful people like Steve Jobs created a new, and truly improved distribution outlet, and the majority of artists embraced the shift. You have to sort of chalk up the popularity of a lot of these indie bands to this new generation of music distribution, and thank goodness for that.

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